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Debunking Daschlenomics By: Chris Weinkopf
FrontPageMagazine.com | Wednesday, January 09, 2002


IN STAKING OUT the Democrats’ battle cry for the November elections, Senate Majority Leader Tom Daschle has struck upon the strange theme of "fiscal responsibility."

To read his much-trumpeted speech before the Center for National Policy last Friday, in which he tries to cast Democrats as the party of economic moderation and balanced budgets, one could easily forget that just last year, the Senator helped to pass a budget that increased discretionary spending by a whopping 8 percent. If "fiscal responsibility" is Daschle’s passion, it’s a new one.

Daschle never mentions that in the 1990s, his party fought tooth and nail against a balanced budget amendment. And while he paints the Clinton years as America’s golden age (without using Clinton’s name once in a 5,000-word speech), he fails to note that Clinton had argued vehemently that a balanced budget was impossible before unexpectedly high revenues and a Republican Congress forced his hand.

For Daschle, history boils down to a simple "template": Clinton assumes the presidency amidst deficits and recession, and leaves office buoyed by prosperity and surplus; George W. Bush takes over and promptly brings back the red ink and hardships of his father’s presidency. Democrats are the party of boom times and balanced books; Republicans are the bad boys of slow-growth and high credit-card balances.

This thumbnail sketch of history leaves out a few inconvenient details, though, like the Carter years. Nor does it include the Reagan tax-cut driven recovery. It fails to recognize the money and political capital that the current president and Reagan before him had to spend rebuilding a military left devastated by their Democratic predecessors, or that both presidents had to fight wars (Reagan’s cold, Bush’s hot) that Carter and Clinton had done their best to ignore.

The Internet boom and bust play no part in the country’s recent economic fortunes, either, at least according to Daschle. And Sept. 11 merits little more than a footnote. "The biggest reason" for the budget deficit and a longer than necessary recession, Daschle says, is Bush’s modest 2001 tax cut.

The economic reasoning behind Daschle’s take on history that high taxes yield budget surpluses, which in turn beget low interest rates, and low interest rates are the key to a healthy and happy economy. Never mind that interest rates are currently low, and that they have only dropped since Bush took office, or that in a less-taxed economy, businesses and families alike have less reason to borrow in the first place. Facts never stood in the way of Clinton’s political career, and Daschle is determined not to let them obstruct his, either.

If we are to understand Daschle correctly, the worst thing the government can do is let taxpayers hang on to too much of their own money. Only when Washington consumes as much of the Gross National Product as possible can the American people be assured of any sustained prosperity. The government that taxes most governs best.

It’s fine for Daschle to peddle absurd economic theories. That’s what left-wing politicians are for. But he should have the courage to advocate policies that reflect his convictions. Why not begin by calling for rescinding the Bush tax cutsmaybe even confiscate what’s left of those $300 refund checks we all got last summer? Why not jack the upper income-tax bracket up to 90 percent and start taxing BTUs, SUVs, DVDs? Go after the Internet and e-commerce, e-mail, e-anything that moves.

The South Dakota Democrat could bundle all the levies into one bill, call it the Daschle Fiscal Responsibility Plan, and take it directly to the American public. But don’t count on it. Daschle knows better than to raise taxes during an election year, even if he can score some political points by blaming tax cuts for the weak economy.

Despite designating the Bush tax cuts as the single greatest obstacle to America’s economic recovery, Daschle pulls up short of calling for their termination. Instead, he offers a half-dozen "tax cuts that work"targeted credits carrying preconditions that allow Washington to further micromanage the economy. Far from proposing an austere series of spending cuts to bring about the "fiscal responsibility" he champions, Daschle offers some 15 new spending programs, designed, no doubt, to create yet more dependable and dependent Democratic constituencies.

Ultimately, Daschle offers a budget even more expensive than the one in place, one that’s poll-tested and designed to boost Democrats’ electoral prospects, not revive the economy. After all, an improved economy would undermine Daschle’s presidential ambitions. That’s why he quashed Bush’s tax-cut loaded economic stimulus bill. For all the talk of "fiscal responsibility," his concerns don’t seem to extend beyond his party’s political ambitions in 2002 and his own in 2004.

Daschle doesn’t need to cite by Clinton by namehe’s doing it in spirit.


Chris Weinkopf is an editorial writer and columnist for the Los Angeles Daily News. To read his weekly Daily News column, click here. E-mail him at chris.weinkopf@dailynews.com.


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